A People’s History of the United States

The history of the last century is the history of oil. Due in part to catastrophes like the oil spill from the Exxon Valdez on March 24th 1989 and the recent increase in reporting on Global Warming, by now most people are at least passively aware of the environmental dangers involved with the world’s dependency on oil. According to Project Underground, the California based industry watchdog, petroleum exploration currently threatens old growth frontier forests in 22 countries, coral reefs in 38 countries, and mangroves in 46 countries. Keep in mind that this is just what is being destroyed while these corporate giants look for future sites to exploit. Given the incredible danger this industry represents to humanity, one might ask what kind of people would continue to push the world into ever greater use of petroleum products while simultaneously thwarting efforts to develop alternatives such as renewable energy sources. Well would it be any surprise that they would be the same type of people that would actively collaborate with the Nazis and the Japanese fascists during the second world war, or the types of people who today would employ military death squads against peaceful protesters? This space is far to short to give even a superficial introduction to the history of back room deals with dictators, violence, murder, and genocide which is synonymous with the history of oil, but just to illustrate my point I will briefly discuss some of the lower points in the history of Standard Oil and its progeny.

The Standard Oil Trust was dissolved under court order in 1911 creating many smaller regional companies, including Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), Standard Oil of California (Chevron), Standard Oil of Ohio (Sohio), Standard Oil of Indiana (Amoco), Continental Oil (Conoco), and Atlantic Oil (ARCO). By 1941 Standard Oil of New Jersey was the largest oil company in the world, controlling 84 percent of the U.S. petroleum market. Its bank was Chase and its owners were the Rockefellers. J.D. Rockefeller had always argued that two things were essential to the oil industry’s survival: checking “ruinous competition” and “cooperation.” Given the success of his monopoly at making enormous profits for its investors while at the same time destroying any form of competition and keeping prices artificially high, it seems quite clear whose survival he was really talking about.

After the Rockefellers, the next largest stockholder in Standard Oil was I.G. Farben, the giant German chemical company. This investment was part of a pattern of reciprocal investments between the U.S. and Germany during the Nazi years. During the Great Depression, Germany was viewed as a hot area in which to invest.

A brief aside is required here to explain what type of company I.G. Farben actually was. At the time, it was the world’s largest chemical company and through the talents of its scientists and engineers, it secured the vital self-sufficiency that was to enable Germany to maneuver in the world of power politics. From its laboratories and factories flowed the strategic raw materials that Germany’s own territory could not supply, the synthetics of oil, gasoline, rubber, nitrates, and fibers. In addition, I.G. produced vaccines and drugs such as Salvarsan, aspirin, Atabrine, and Novocain, along with sulfa drugs, as well as poison gases and rocket fuels. The depth of I.G. Farben’s connection to Nazi policy was finally realized at Auschwitz, the extermination center where four million people were destroyed in accordance with Hitler’s “Final Solution of the Jewish Question”. Drawn by the seemingly limitless supply of death camp labor, Farben built I.G. Auschwitz, a huge industrial complex designed to produce synthetic rubber and oil. This installation used as much electricity as the entire city of Berlin, and more than 25,000 camp inmates died during its construction. I.G. Farben eventually built its own concentration camp, known as Monowitz, which was closer to the site of the complex than Auschwitz was, in order to eliminate the need to march prisoners several miles to and from the plant every day.

This was the company enthusiastically embraced by Standard Oil as well as other major American corporations like Du Pont and General Motors. I do not, however, state that Standard Oil collaborated with the Nazis simply because I.G. Farben was its second largest shareholder. In fact, without the explicit help of Standard Oil, the Nazi air force would never have gotten off the ground in the first place. The planes that made up the Luftwaffe needed tetraethyl lead gasoline in order to fly. At the time, only Standard Oil, Du Pont, and General Motors had the ability to produce this vital substance. In 1938, Walter C. Teagle, then president of Standard Oil, helped Hermann Schmitz of I.G. Farben to acquire 500 tons of tetraethyl lead from Ethyl, a British Standard subsidiary. A year later, Schmitz returned to London and obtained an additional 15 million dollars worth of tetraethyl lead which was to be turned into aviation gasoline back in Germany.

After the war began in Europe, the English became angry about U.S. shipments of strategic materials to Nazi Germany. Standard Oil immediately changed the registration of their entire fleet to Panamanian to avoid British search or seizure. These ships continued to carry oil to Tenerife in the Canary Islands, where they refueled and siphoned oil to German tankers for shipment to Hamburg.

This deception was exposed on March 31, 1941 when the U.S. State Department issued a detailed report on refueling stations in Mexico and Central and South America that were suspected of furnishing oil to Italian and German merchant vessels. The report listed Standard Oil of New Jersey and Standard Oil of California among those fueling enemy ships, but there is no record of any action being taken as a result of this discovery. Similar deals between Standard Oil and the Japanese government for the purchase of tetraethyl lead have also been uncovered, but no direct action was ever taken against Standard Oil for its dealings with America’s enemies. A brief side note, however, is that on April 17, l945 the Chase National Bank was placed on trial in federal court on charges of having violated the Trading With the Enemy Act by converting German marks into U.S. dollars. Because many countries refused to accept German currency during the war, the Nazis used foreign banks like Chase National to change the currency into money that would be accepted, and thus allowed them to purchase much need materials to prolong the war. The closer one looks, the more ties one finds between American business and Nazi Germany, many of which remained strong well into and beyond the war.

The optimists among you might say, “Well, that was a long time ago, and the oil companies today are nothing like they were in the late 30’s and early 40’s.” Unfortunately, some things never change, and some things actually go backwards. In 1999, when Exxon (formerly Standard Oil of New Jersey) bought Mobil (formerly Standard Oil of New York) to create Exxon-Mobil, they formed the world’s largest oil company (ahead of Royal Dutch/Shell), and the fourth largest U.S. company by sales (behind General Motors, Ford, and Wal-Mart). In fact, in their previous incarnations, Exxon and Mobil accounted for over half of the total value of the Standard Oil Trust dissolved in 1911 (and I haven’t even mentioned that Amoco, also an offshoot of Standard Oil, was recently purchased by British Petroleum, whose U.S. assets are largely derived from its absorption of yet another Standard Oil offspring, Sohio).

These giant oil companies have a long and continuing history of abusing the human rights of the people on whose land they drill for oil as well as showing a careless disregard for the environment. Exxon-Mobil has often used helicopters to harass indigenous communities in Peru and elsewhere around the world. In addition, Exxon-Mobil is part of an international consortium along with Shell and the French oil company ELF which was planning a multi-billion dollar oil exploitation project in the African nations of Chad and Cameroon that posses serious environmental and social risks. The project consists of the development of oil fields in southern Chad and building a 600-mile pipeline through Cameroon for export which would be supported by public funding from the World Bank. The 600-mile underground pipeline through Cameroon will pass through ecologically fragile rainforest areas, including an area that is the home of a Pygmy minority of traditional hunters and gatherers. As a result of the project, deforestation, wildlife poaching, and the loss of farmland will accelerate, creating a destructive environmental legacy. The pipeline poses a danger of groundwater contamination and pollution of important regional river systems, as crude oil containing heavy metals leaks into the environment.

Some might say that compared to selling oil to the Nazis these things are not really so bad. To put things more in prospective, let’s now turn to Chevron (formerly Standard Oil of California), which is the third largest U.S. integrated oil company (behind Exxon-Mobil and Texaco), and which has one of the worst records in recent times of abusing human rights. One indisputable example of this abuse is in the Nigerian Delta. Nigeria is the sixth-largest oil-producing nation in the world, but few people in the Niger Delta share in the profits. Many communities have no electricity, clean water or medical clinics, and suffer the health effects of oil pollution. The explosion of a gas pipeline in Nigeria’s oil-producing region in October 1998 killed more than 700 people, and sparked widespread resistance which succeeded in shutting down a third of the country’s oil production. The transnational oil companies and their Nigerian military business partners responded to this threat to their profits with raw violence. On May 28, 1998 Chevron facilitated an attack by the feared Nigerian Navy and notorious Mobile Police, known as the “Kill ‘n’ Go”, on an unarmed group of people from a delta village called Ilajeland who had occupied one of Chevron’s offshore drilling facilities. Among the people’ demands were clean drinking water, electricity, environmental reparations, employment and scholarships for young people. After occupying the facility for three days, the villagers thought they were waiting for Chevron’s response to their demands when helicopters landed amidst a hail of tear gas and bullets. The Nigerian military shot to death two protesters, Jola Ogungbeje and Aroleka Irowaninu, critically wounded a third man, Larry Bowato, and injured as many as thirty others. Chevrons facilitated this brutal attack by transporting the Nigerian soldiers and Mobile Police to the platform in company helicopters. In addition, Chevron’s acting head of security in Nigeria, James Neku, flew with the military to the installation the day of the attack. The worst part of all this is that these are but a few small examples of the types of tactics still used by nearly every oil company to insure their profits at any cost.

I do not want to give the impression that everyone who works for these companies is a monster. The people who run these corporations are all too human, and they have chosen to put the profits of their companies and their own wealth above even the simplest human considerations. If we are ever to turn back the tide of ecological disasters and human tragedies that have been synonymous with the advance of oil, we must first acknowledge the ruthless and amoral nature of these companies and take a stand against their further consolidation of power. Only then can we hope to take back our world and begin to write our own history.